When I had my first kid, everyone told me to “start saving for college right away.” I nodded, smiled, and then promptly felt overwhelmed by all the options. Now, with two kids, I’ve finally found an approach that works — and more importantly, one that doesn’t keep me up at night.
Our Saving Strategy
We keep it simple with three buckets:
1. 529 College Savings Plans
Each kid has a NY 529 plan. We auto-contribute $150/month per child. It’s not a huge amount, but compound growth over 15+ years makes a real difference. The tax advantages are a nice bonus too.
2. High-Yield Savings Account
We have a joint HYSA (currently earning ~4.5% APY) for short-to-medium-term goals — summer camps, activities, braces, or whatever pops up. We keep about $5,000 in here as a “kid fund.”
3. Our Own Emergency Fund
This isn’t technically “for the kids,” but having 3–4 months of expenses saved gives me peace of mind that we can handle surprises without derailing the kids’ savings.
How We Automate Everything
Automation is the secret weapon. On the 1st of every month:
- $300 goes to 529 plans (split between two kids)
- $200 goes to the HYSA kid fund
- We don’t think about it or touch it
What I’m NOT Doing
- Not investing in individual stocks for them — too stressful, too much effort
- Not obsessing over the “perfect” fund allocation — we picked a target-date fund in each 529 and left it alone
- Not comparing ourselves to other families — we save what we can, period
Gifts and Birthdays
Instead of more toys, we ask grandparents and family to contribute to the 529 plans. Most platforms make it easy to share a gift link. This has been a game-changer, especially around holidays.
The Math That Keeps Me Calm
$150/month per kid × 18 years, assuming ~7% average return = roughly $65,000 per child by the time they’re 18. That won’t cover everything, but it’s a solid foundation. And if they get scholarships or choose a different path, the 529 money can be rolled into a Roth IRA (thanks to recent rule changes).
My Advice to Other Parents
Start with whatever you can — even $25/month matters. Don’t wait for the “perfect” time or the “right” amount. Set it up once, automate it, and focus your energy on the things you can control today. Future you will be grateful.